Departamento

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de Engenharia
de Engenharia
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Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

EWGT2013
16th Meeting of the EURO Working Group on Transportation
Session C3. Economic Appraisal

Linking managerial decisions and performance in

urban public transport: the case of Porto
lvaroCosta,PhDafcosta@fe.up.pt
SebastianEbert,M.Sc.Sebastian.Ebert@fe.up.pt
TeresaStanislau,M.Scteresastanislau@gmail.com

Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

Part1:Introduction

PublicTransport,ManagementandDecisionMaking
PublicTransportandProduction
ResearchRational
BenchmarkingMethods

Part2:CaseStudy

STCP
DEAResults
DecisionAnalysisandPerformanceLink

Conclusion

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

2/18

Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

Introduction

Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

PublicTransportandManagement

PublicTransportshouldallowforhighlevelsofmobilityasameaningfulalternativeto
costintense,congestionproneprivatetransport.TheadequatefunctioningofPublic
Transportcontributesmainlytoacity'squalityoflife!

PublicTransportManagementfacessomerestrictions:growing/decreasingdemand,
soaringenergycosts,environmentalrestrictions,financialshortagesinpublicsector,EU
obligations,changingregulatoryenvironment,...

ManagerialChallengeHowtoactinnovativeandentrepreneuriallysoundinthis
economicenvironment(whilefocusingontheproduct)?

Managersdrivingwheel:setofdecisions(decisiontoolbox)!
EWGT2013 -16th Meeting of the EURO Working Group on Transportation
4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

4/18

Departamento
Departamento
de Engenharia
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Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

DecisionToolBox
DecisionCategory
Network
Financial
Personnel
Fleet
Schedule
Service

Specification
creation,alterationoreliminationoflines//additionalservices//additional
modes //mergersandlinkedtransportsystems//...
changesandadjustmentsinthepricingpolicy//fares//revenuesby
advertisement//...
numberofstaff//useofsocialprograms//totalworkhours //training//
numberandcomposition//technology//maintenance//...
alterationinthefrequencyofroutes//schedulingofroutes//...
technical:newequipmentonvehiclesoperated//ontimeinformation//...
operational:operationalandcommercial
IT:provision,processingandanalysisofoperationalinformation

Decisionshaveacertainimpactonthecompany'sperformance
Performanceanalysisrequirestothinkproductionterms
EWGT2013 -16th Meeting of the EURO Working Group on Transportation
4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

5/18

Departamento
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de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

ProductionProcessinPublicTransport

Relationbetweentheresourcesused andthequantities/qualityofserviceproduced
Keyconcepts:Productivity,Efficiency,Effectiveness

Figure 1 Simplified public transport process

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

6/18

Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

ResearchRational

Status quo: Lack of knowledge on the relation between management decisions and
economic performance of urban public transport systems

Unknown: To which extend (quantitatively, temporally ) do management decisions

affect performance over time? Decisions need time (timelag) to unfold, most studies
focus on a rather short time frame!

Goal: extend/use the concepts of productivity, efficiency and effectiveness by

including the decision framework (in economic, technical or legal terms ) of public
transport companies

Benefit: an economic preassessment/model/theory on the effects of strategic

company choices would be helpful for decision makers (company level, political level)

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

7/18

Departamento
Departamento
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de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

BenchmarkingMethods

Figure 2 Overview on benchmarking measures

EWGT2013 -16th Meeting of the EURO Working Group on Transportation
4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

8/18

Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

CaseStudy

LiteratureReview
Departamento
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de Engenharia
de Engenharia
Civil (DEC)
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- CITTA
(DEC) Doctoral Programe Transportation Systems

CaseStudy:SociedadedeTransportesColectivosdoPorto,S.A.(STCP)

Founded 1946; 83 routes (including 11 late nightonly routes; 4 tram routes);

472 buses; 8 trams; daily ridership: 370.000

Extensive records of operational activity and organisational management data

was available for 1946 to 2004 Approach: 59 years timeseries; DEA (BCC,
inputoriented), singlecity

Step 1: DEA1 (Performance Analysis)

Step 2: Decision Analysis

Step 3: DecisionPerformance Link

1input: staff,

fleet; output: vehiclekm (efficiency) or number of passengers (effectiveness)

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

10/18

LiteratureReview
Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

STCP:DEA Results
Year
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965

Efficiency
1
1
0.923971448
0.932342844
0.920778131
0.93632465
0.968532954
0.959128148
0.958369884
0.94487776
1
0.963512247
1
1
0.991112227
0.999815536
0.989713751
1
0.979120951
1

Effectiveness
1
1
0.910551658
0.889129277
0.883208584
0.878598932
0.900520453
0.882177624
0.88785922
0.890757227
0.908364894
0.879134788
0.915954158
0.868937242
0.842000714
0.8458549
0.835047681
0.8507314
0.834887066
0.868144018

Year
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985

Efficiency
0.942591185
0.779821362
0.814996625
0.817450728
0.815804829
0.825052636
0.821495587
0.801422582
0.763198815
0.751625014
0.7150455
0.6076476
0.6323497
0.6703846
0.7028293
0.6977549
0.7131688
0.7453633
0.7209929
0.7337879

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

Effectiveness
0.827696081
0.655694603
0.678896692
0.698055875
0.679568872
0.647463313
0.670191241
0.696953043
0.695076763
0.675469404
0.703747429
0.64909782
0.727308308
0.873649545
0.991169509
0.996433862
1
0.988262913
0.943667001
0.973077436

Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

Efficiency
0.718867
0.7518898
0.7400359
0.7283213
0.7433105
0.7607714
0.7870174
0.8092022
0.8364091
0.9108853
0.9464738
0.9677963
1
0.9081547
0.8897139
1
0.9295056
0.9439455
1

Effectiveness
0.928866357
1
0.916046414
0.960513001
0.958579067
0.922702658
0.917286507
0.903264004
0.882920614
0.925592109
0.936019528
0.936548972
0.957527243
0.933586276
0.923257536
0.910643663
0.946332175
0.923327211
1

11/18

LiteratureReview
Departamento
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de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

Second half: more

effective than efficient

STCP:EfficiencyandEffectiveness

Last 15 years:
convergence
800

350.000

1966 -76:
massive drops
in both values

First half: more

efficient than
effective

300.000

700
600

250.000

500
200.000
400
150.000
300
100.000

200

50.000

No.ofDecisionsp.a.(06)

Efficiency

Effectiveness

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

Frontier

PAXp.a.

2001

1996

1991

1986

1981

1976

1971

1966

1961

1956

1951

1946

Figure 3
Performance
STCP 1
1946-2004

100
0

Vehiclesp.a.

12/18

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(DEC) Doctoral Programe Transportation Systems

Efficiency/EffectivenessMatrixandDecisionAnalysis
early stage = network
decision:

product creation
40
35
35
30
30

later stage = service

decision:

28
25

25

22

service creation
18

20
13

15

10
10
5
0
Network FincancialPersonnel Fleet

Figure 4 Efficiency-Effectiveness Matrix 1946-2004

Schedule Service Service Service

(tec)
(op)
(IT)

Figure 5 Decision count and shares1946-2004

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

13/18

LiteratureReview
Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

DecisionAnalysis
Category
Network

Observations,MajorDecisions&Comments
focusondeveloping,constructingandimprovingthelinesandroutesduring19501965;Portoconcessions 1956:adding
severalperipheralzones;longbreakofalmost20years(1980 1998)waslatercompensatedbynetworkchanges
(alteration,creationofnewlines,introductionofadditionalservices,e.g.touristbus,etc.)
STRATEGY: create,experiment,exploitandobserve,andthenalterorupdateaccordingtonewlyemergedrequirements

Fleet

evenlydistributedoverobserved period,indirectindicatorofoperationsdevelopmentanddemandcapacitygrowth
increasingthenumberofoperatedvehiclesandfleetrenewal
STRATEGY: createefficientandwellmaintainedfleetinordertoprovideefficientservices
intenseinthebeginningofthecompanysoperations(years1946 1964);almostabsentinthesecondhalfoftheyears

Schedule investigated

extensivelydevelopedinthesecondhalf(startingfrom1966),changesandrevisionsofthefaresystem(1981 1985),
interrelatedwiththeexternaleconomic(social)context
evendistributionthroughouttheentireperiod;socialbenefits,training:1952,19601963;singleagentpolicy1970to
Personnel 1986;staffreduction1988;
19501965:relatedtotransportinfrastructure;1989 2004:relatedtomodernizationoftechnicalinfrastructure;more
Servicing intenseinthelast1015years(duetoinnovativeapplications)
oilpricesincreaseandenergycrises,socialrevolution,subsidizingpolicy,organizationalchangesinthesector,competition
Context (MetrodoPorto)

Financial

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

14/18

LiteratureReview
Departamento
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de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

DecisionPerformanceLinkandTimeLags
19461950:STCPwasmanagedbythecitycouncil;mostlynetworkdecisions

10%effectiveness

19511965:reorganisationofnetworkforelectrictrams,revisionofthefaresystem

+/ 2%efficiencychangesathigh
levels,effectivenessdecreasing

19681975:effectsfromgrowthsupportivedecisions(increaseofcapacity,changes
infaresystem,personnelbenefitsincrease)wereabsorbedbyexternalshocks
(deficiencyfleet,completeredesigningofservices,oilpriceincreasefollowedbyan
energycrisis,andthesocialrevolutionof1974)

lowperformanceofboth
indicators

1976:implementationofsocialfares
1979:implementationofsingleagentpolicy(majordecision)
early80s:ceasingofelectrictramsoperationandextensionofthebusnetwork
90s:customerorienteddecisions(newtickets),recoveringofconcessions
early00s:busleasingagreement
EWGT2013 -16th Meeting of the EURO Working Group on Transportation
4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

effectivenessincreasedupto
100%,efficiencydecreased
(timelagof4years)
efficiencyincreasedupto100%
(timelagofupto10years)
effectiveness+5%
effectiveness+3%
(timelag5years)
efficiencyincreasedupto100%
(timelag1year)

15/18

LiteratureReview
Departamento
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de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

PreliminarConclusions

Dynamics: although the efficiency and effectiveness values display some differences, the
scores do not move in opposing directions

Performance: major decisions (increase of social benefits and privileges, implementation of a

single agent policy, operational fleet leasing )and external factors (social revolution, oil
crisis) were identified

Timelags: on average medium term periods from 2 to 4 years (exceptionally up to 10 years)

Further research fields: empirical proof of timelags; Extension of case studies, Existence of
rules (e.g. decision A leads averagely to B % efficiency) in public transport management;
Are the decision patterns comparable among public transport companies?; Identification of
performance types among PT companies (e.g. rather efficiency oriented, effectiveness
oriented); Costs of performance (link to investments); Disturbances by external factors as a
cause for weak performance?; Additional mode appears effects (Metro do Porto?)....

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

16/18

ProposedMethodology
Departamento
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de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

Futurecasestudies(planned)
Country

Portugal

City,mode

Porto,
STCP

Porto,Metro

competitors,
citybasedcasestudy

Porto,STCP

Lisbon,Metro

Lisbon,Carris

Madrid,Metro

Lisbon,Metro

Spain

Germany

Lisbon,Carris

Madrid,Metro

Madrid,EMT

Barcelona,TMB

Berlin,BVG

Dresden,DVB

samemode,crosscity,
Iberiancasestudy

partiallysamemode
Iberiancasestudy

partiallysamemode
Europeancasestudy

samemode,crosscity
Portuguesecasestudy

samemode,crosscity
Iberiancasestudy

partiallysamemode
Iberiancasestudy

partiallysamemode
Europeancasestudy

partiallysamemode
Europeancasestudy

competitors,
citybasedcasestudy

samemode,crosscity,
Iberiancasestudy

partiallysamemode
Iberiancasestudy

partiallysamemode
Europeancasestudy

samemode,crosscity,
Iberiancasestudy

partiallysamemode
Iberiancasestudy

partiallysamemode
Europeancasestudy

partiallysamemode
Europeancasestudy

competitors,
citybasedcasestudy

partiallysamemode
Iberiancasestudy

partiallysamemode
Europeancasestudy

partiallysamemode
Iberiancasestudy

partiallysamemode
Europeancasestudy

partiallysamemode
Europeancasestudy

sameoperationalform
(oneentity)European
casestudy

sameoperational
form(oneentity)
Europeancasestudy

sameoperational
form(oneentity)/
citybasecasestudy

samemode,
Portuguese case study

Madrid,EMT

Barcelona,TMB

Berlin,BVG

EWGT2013 -16th Meeting of the EURO Working Group on Transportation

4 September 2013 Session C3. Economic Appraisal
COSTA, EBERT, STANISLAU (2013): Linking managerial decisions and
performance in urban public transport: the case of Porto

17/18

Departamento
Departamento
de Engenharia
de Engenharia
Civil (DEC)
Civil
- CITTA
(DEC) Doctoral Programe Transportation Systems

THANK YOU FOR YOUR

ATTENTION !